On the Timing of Production Decisions in Monetary Economies

Anbarci, N.; Dutu, R.; Sun, C.-J.

Abstract

In most macroeconomic models inflation tends to be harmful. In this paper we show that by simply changing the timing of production decisions by firms from 'on demand' to 'in advance', some inflation can boost welfare as long as goods are sufficiently perishable. The main conclusion from this research is that by effectively hiding the strategic interaction between supply and demand, assuming production on demand is not without loss of generality.

Citation

Anbarci, N., Dutu, R., & Sun, C.-J. (2019). On the Timing of Production Decisions in Monetary Economies. International Economic Review, 60(1), 447-472. https://doi.org/10.1111/iere.12359

• Journal Article Type: Article
• Acceptance Date: Mar 29, 2018
• Online Publication Date: Oct 9, 2018
• Publication Date: Feb 28, 2019
• Deposit Date: Aug 16, 2018
• Publicly Available Date: Aug 31, 2020
• Journal: International Economic Review
• Print ISSN: 0020-6598
• Electronic ISSN: 1468-2354
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 60
• Issue: 1
• Pages: 447-472
• DOI: https://doi.org/10.1111/iere.12359
• Public URL: https://durham-repository.worktribe.com/output/1322865